November 4, 2013 (Nes Ziona, Israel and Darmstadt, Germany) – Merck Serono, a leading global pharmaceutical company, and Kadimastem, a developer of human pluripotent stem cell-based drug screening and therapeutic solutions, announced today the signing of an MOU aimed at advancing the two companies’ current stem cell-based drug screening collaboration which was initiated in April 2012.

Kadimastem has developed technologies to differentiate stem cells into Oligodendrocytes (brain cells that produce myelin, the insulation for the neural wiring (axons)). In Multiple Sclerosis oligodendrocytes are destroyed by the immune system. Kadimastem and Merck Serono have been leveraging cell-based drug screening technology to discover compounds which stimulate differentiation and myelination (the insulation of axons). Such compounds may lead to next generation therapeutics for Multiple Sclerosis, mainly in those stages where current drugs that affect the immune system have no more therapeutic use, and potentially treating this unmet medical need.

A key goal of the newly signed MOU is to establish drug screening assays using stem cell-derived Astrocytes. Astrocytes are neural supporting cells that have been shown to be involved in neurodegenerative diseases such as Amyotrophic Lateral Sclerosis (ALS).

Dr. Annalisa Jenkins, Executive Vice President and Head of Global Development and Medical for Merck Serono said, “We have been working closely with Kadimastem’s scientists for the past year and a half, and have been impressed by the company’s unique stem cell differentiation and drug screening capabilities. Kadimastem offers us a unique, human-cell based, screening model allowing us to better identify promising compounds at an earlier stage in development. I look forward to advancing collaboration on this front as I believe it has the potential to play an important role in our R&D efforts.”

Yossi Ben Yossef, Kadimastem CEO, noted, “This MOU is an important validation to both the need of the pharmaceutical industry for a stem cell-derived drug screening platform, as well as to Kadimastem’s leading technological and scientific capabilities in this field. We view Merck Serono's decision to advance the collaboration as an important step forward for our current activity, and as a springboard for further technological developments and collaborations in the near future. We value the partnership with Merck Serono and believe it will bring innovative new treatment modalities.”

Professor Michel Revel, Kadimastem CSO and developer of Merck Serono’s leading drug for the treatment of Multiple Sclerosis, Rebif®, said: “I am very pleased we are able to advance our collaboration with the Merck Serono team which is a leader in the field of neurodegenerative disease therapeutics. I believe that Kadimastem's stem cell technologies have tremendous potential for the discovery of new therapeutic agents for neurodegenerative diseases as well as diabetes. The standardized and reproducible methods by which we differentiate our stem cell-derived Oligodendrocytes and Astrocytes make them an excellent tool for drug discovery and development efforts.”

About Kadimastem

Kadimastem (TASE:KDST) develops human pluripotent stem cell-based drug screening and therapeutic solutions for diabetes and neurodegenerative diseases. The company’s platform technologies allow for in-house expansion of stem cells and their differentiation into a range of functional human cells including brain glia cells such as Oligodendrocytes and Astrocytes, as well as pancreatic insulin-producing Beta cells.

The company is pursuing two paths for commercialization: (1) In Drug Discovery by using its stem cell derived cells for efficiently screening for drug candidate in the fields of neurodegenerative diseases and diabetes respectively, and (2) In Cell Therapy by using its stem cell-derived beta cells to advance a cure for type 1 diabetes, and its glia cells to advance a cellular therapy cure for Amyotrophic Lateral Sclerosis (ALS). To find out more please visit Kadimastem’s website – www.kadimastem.com.

About Merck Serono

Merck Serono is the biopharmaceutical division of Merck. With headquarters in Darmstadt, Germany, Merck Serono offers leading brands in 150 countries to help patients with cancer, multiple sclerosis, infertility, endocrine and metabolic disorders as well as cardiovascular diseases. In the United States and Canada, EMD Serono operates as a separately incorporated subsidiary of Merck Serono. Merck Serono discovers, develops, manufactures and markets prescription medicines of both chemical and biological origin in specialist indications. We have an enduring commitment to deliver novel therapies in our core focus areas of neurology, oncology, immuno-oncology and immunology. For more information, please visit www.merckserono.com